Oxbridge joins charity tax furore

Oxford and Cambridge universities have joined the increasingly bitter row over Chancellor George Osborne's controversial cap on tax relief for charitable donations.

PUBLISHED: 05:05, Fri, Apr 13, 2012

George Osborne's cap on tax relief for charitable donations has come under further attack [PA]

Oxford and Cambridge universities have joined the increasingly bitter row over Chancellor George Osborne's controversial cap on tax relief for charitable donations.

Andrew Hamilton, vice-chancellor of the University of Oxford, has written to Mr Osborne warning that the plan "risks undermining the culture" of university philanthropy, The Times reported.

A university spokesman told the paper: "We have done our best, along with other universities and charities, to foster a culture of giving in the UK, and this move risks undermining that culture."

Sir Leszek Borysiewicz, vice-chancellor of the University of Cambridge has also written a private letter to Mr Osborne expressing his concern, the paper said.

On Thursday senior Liberal Democrat Cabinet minister Vince Cable let it be known that he was "sympathetic" to concerns raised by universities that funding for scholarships and research could be hit by the move.

Meanwhile, Arts Council England warned at least £80 million in regular donations to its organisations was at risk, while a new £55 million "matched funding" scheme with the Department for Culture, Media and Sport (DCMS) could also be in jeopardy.

Mr Cable's intervention came after the umbrella body Universities UK wrote to Mr Osborne warning that they were likely to be "particularly hard-hit" by the cap as they relied heavily on big donations.

"Concerns have been raised with ministers including Vince by universities and he's sympathetic to those concerns," a spokeswoman for Mr Cable said. "We will make sure that what we are hearing from universities is fed back to the Treasury."

Treasury Minister David Gauke insisted the Government stood by the "broad principle" of the cap in order to stamp out "abuse" of the system by wealthy individuals who used tax relief to minimise their income tax payments.

But after David Cameron said during his tour of the Far East that he was "very sympathetic" to the concerns raised by charities, Mr Gauke said the Treasury was looking at how it would be implemented.